Trade Minister, Andrew Robb, has penned an article in The AFR today hailing the Trans-Pacific Partnership (TPP) trade agreement – US-led regional trade pact between 12 nations (including Australia) – which is on the cusp of being concluded:
…the TPP is a big deal… It carries transformational promise.
Not only will it afford new levels of market access for our goods, services and investment, but it will put in place the architecture and common set of trading rules to allow for more seamless trade between countries accounting for 40 per cent of the world’s economy.
As well as covering the traditional areas of trade like eliminating tariffs, the TPP will for the first time address contemporary items such as e-commerce, intellectual property and investment flows as well as broad ranging disciplines on environmental and labour issues and settings to specifically benefit small and medium-sized enterprises (SMEs).
Inevitably, a successful conclusion will mean higher growth, more jobs and improved living standards for the countries involved in the years and decades ahead…
Conveniently, Robb has failed to mention that the TPP would establish a US-style regulatory structure that would hand considerable power to US pharmaceutical and digital firms, limiting choice and raising prices for consumers in Australia.
In November 2013 and October 2014, WikiLeaks released drafts of the intellectual property chapter, which included a “Christmas wishlist” for pharmaceutical companies, including the proposal to extend patent protection and strengthen monopolies on clinical data. Most worryingly, the US is seeking patents for “new forms” of known substances, as well as on new uses on old medicines – a proposal which would lead to “evergreening”, whereby patents can be renewed continuously, forcing-up Australian consumers’ (and taxpayers’) pharmaceutical costs via reduced access to cheaper generic drugs and reduced rights for the Government to regulate medicine prices. Such a move also risks stifling innovation in the event that patent terms are extended too far.
For these reasons, health academics and the Australian Medical Association alike have raised the alarm over the TPP, warning that it could force-up the cost of pharmaceuticals in Australia and “compromise the ability of governments to improve public health”.
The US is also seeking an Investor-State Dispute Settlement (ISDS) clause in the TPP, which would give authority to major corporations to challenge laws made by governments in the national interest in international courts of arbitration. So effectively, US companies would be allowed to sue the Australian Government under international law – a move that is being pursued by Philip Morris against Australia on plain packaging and graphic warnings for cigarettes under an obscure agreement signed with Malaysia in the early-1990s. It’s a huge threat to Australia’s sovereignty, since it would effectively limit the Government’s ability to form public policy and its ability to regulate in the public interest.
The US has also sought to prevent circumvention of technology that restricts products to certain regions – even though this was recommended by the Australian parliament’s Inquiry into IT Pricing – as well as rules banning parallel importation of goods made under authorisation in other countries, which would hand greater power to US content creators and push-up prices for consumers.
Rather than freeing-up trade and raising Australians’ welfare, as argued by Robb, the TPP would grant greater power to international multinational corporations, increasing their rents at the expense of consumers and taxpayers.
For this reason, several notable experts have voiced strong opposition to the TPP fearing that it represents grave risks for the global trading system and citizens of countries operating within it.
Former World Trade Organisation (WTO) director-general, Supachai Panitchpakdi, claims the TPP represents a step backwards to the days before the WTO when the US and Europe controlled the global trading system to the detriment of other economies.
Nobel Prize winning economist, Joseph Stiglitz, raised similar fears in an open letter posted late last year, whereby he questioned negotiators’ secrecy and warned about “grave risks on all sorts of topics” posed by the TPP, as well as claiming that it contains “many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible”.
Paul Krugman, another nobel prize winning economist and trade expert, has also slammed the TPP, noting that it would “increase the ability of certain corporations to assert control over intellectual property [including] drug patents and movie rights”. Krugman also claimed that “there isn’t a compelling case for this deal, from either a global or a national point of view” and that the “economic case is weak, at best”, with “the push for T.P.P… weirdly out of touch with both economic and political reality”.
Nor do Robb’s soothing words that “we won’t sign up unless our best interests are assured across the agreement” engender much confidence. The Howard Government had no trouble signing Australia up to the US FTA, which has been found to have provided Australia with minimal market access gains, whilst extending patent and copyright terms (at the insistence of the US), increasing costs for Australian consumers.
Indeed, according to Peter Martin, the extension of pharmaceutical patents under the Australia-US FTA, from 14 years to 20 years, has “suppressed the development of a generic drugs industry and cost the government $200 million per year by slowing the entry of cheap generic drugs into the pharmaceutical benefits scheme”. Moreover, “generic manufacturers have missed out on an estimated $2 billion over eight years” whereas “70 per cent of drug patents expire later in Australia than in other countries”.
The motherhood statement from Robb only serves to gloss over the dangers lurking beneath the TPP, and should not be taken seriously.
We should all be very concerned about the secretive sell-out that appears to be occurring, which seeks to place US corporate interests ahead of our own.